Non-directional trading may be an alternative to consider if you’re a stock market trader who is short on time. Non-directional trading is sometimes used by people who have jobs that don’t allow them an opportunity to watch the market during the day. Or it can be used by students who want to learn a strategy that requires less maintenance.
That’s why John White’s Banking on Butterflies DVD series can be helpful. This three-DVD series will teach you how to use a popular non-directional strategy called the iron butterfly. These trades don’t require you to spend a lot of time monitoring a position or watching the market.
A butterfly is a strategy that combines a bull put spread and a bear call spread to create a non-directional position. A butterfly, known by some as a short straddle, makes the use of option time decay to possibly put the odds of success in your favor. With an iron butterfly you could make a profit without correctly determining the market’s direction.
Some students stay away from non-directional trades because they are slightly more complicated than a transaction that requires only a purchase and a sale. But non-directional sales provide more than one opportunity to make a successful trade; you can win if the stock price goes the direction you want and if it stays the same. You may even win – or lose less – if it goes against you.
John White will teach you how to get the most out of your non-directional position. This starts with negotiating with the market marker to get the best price on an option. John teaches you how to negotiate in order to cut the spread of a trade, which widens your margin.
You’ll learn about the maintenance requirement, which is comprised of the credit received and the cost of the trade, and how it affects the position.
John White has taught students from all over the country how to use these non-directional trades. In the Banking on Butterflies DVDs, he does more than just teach the mechanics of how to enter and exit the positions. (Of course, this is very important but should not be the finish line for the course.) He walks you through several historical examples so you can see for yourself what happens under a series of different scenarios.
You’ll be able to see how to define the maximum profit range and establish a topside and bottom side as exit points. You’ll be able to determine the maximum profit potential and learn to find the sweet spot for your profits.
And since trades have been known to go the wrong way, John will teach you how to make adjustments in a position in order to mitigate your losses. He’ll show you that sometimes you can make a few changes and salvage the success of a trade. These adjustments and modifications are important to understand before you begin to trade iron butterflies.
No BetterTrades coach teaches iron butterflies better than John White. He’s been doing it for years and has put his years of experience into this DVD series. It offers a chance to tap into the brain of a master educator whenever it’s the most convenient.